DBT in kerosene a reform; to help better targeting: FinMin

Direct transfer of kerosene subsidy to the bank accounts of users is a reform and would help in better targeting those who actually deserve it, Finance Ministry said today.

The government last night said it will roll out Direct Benefit Transfer (DBT) for kerosene from April 1 where the users will buy the cooking fuel at market rate but will get financial support directly in their bank accounts.

"Congratulations to Petroleum Ministry for announcing DBT in kerosene. Subsidy should be targeted and reach those who actually deserve," Economic Affairs Secretary Shaktikanta Das said in a tweet.

DBT in kerosene will help curtail subsidy outgo for the cooking fuel which in 2014-15 was about Rs 24,799 crore.

"DBT in kerosene: Reforms continue," Das tweeted.

The cash subsidy to be paid to users will be equivalent to the difference between current PDS price of about Rs 12 and market rate of Rs 43 per litre.

The scheme will be rolled out from April 1 in Raipur, Durg and Bilaspur in Chhattisgarh; Panipat and Panchkula in Haryana; Shimla, Solan and Una in Himachal Pradesh, and Chhatra, Giridih, East Singbhum, Hazaribagh, Jamtara and Khunti in Jharkhand.

Besides, the scheme will be implemented in Hoshangabad, Harda, Khandwa and Burhanpur in Madhya Pradesh; Amaravati and Latur in Maharashtra; Taran Taran, Pathankot and Mohali in Punjab and Pali, Jhunjhunu and Kota in Rajasthan.

Currently, the government transfers subsidy to LPG users as well as to beneficiaries of scholarship and pension schemes directly to their bank accounts.